Arlington, Va. - As the U.S. Senate begins debate on a sweeping immigration
reform bill, the National Foundation for American Policy (NFAP), an Arlington,
Va.-based policy research group, has released a new comprehensive study on H-1B
visas - the visas that are essentially the only avenue for international students
and researchers and engineers from abroad to work in the United States.

The study "H-1Bs, Outsourcing, Enforcement and U.S. Workers" can
be found on the NFAP website at www.nfap.com.

The research shows H-1B visa holders are highly skilled, with 57 percent of
new H-1B professionals in 2006 having earned a master's degree or higher, according
to the Department of Homeland Security.

H-1B professionals fill key niches in the U.S. labor market and enhance the
ability of U.S. companies to compete globally for talent and markets, the study
finds. H-1B visa holders keep jobs and innovations inside the United States
and, the evidence indicates, do not lead to the loss of U.S. jobs. When companies
recruit, often on college campuses, they find qualified Americans and many foreign
nationals. In 2005, U.S. universities awarded 55 percent of Masters degrees
and 67 percent of PhDs in electrical engineering to foreign nationals, according
to the American Association of Engineering Societies.

Congress has not increased the annual H-1B cap (of 65,000 with some cap exemptions)
for years, resulting in companies exhausting the supply of visas before even
the start of the past four fiscal years. This has caused firms to go without
needed skilled professionals or being forced to hire individuals outside the
United States or risk losing them to foreign competitors. H-1Bs are temporary
visas, good generally for 6 years. To stay permanently H-1B visa holders must
be sponsored for green cards, which have waits of 5 years or longer due to inadequate
quotas.

The NFAP study found no evidence of increased H-1B abuses, as some have alleged.
In examining DOL enforcement data, the analysis found modest problems that are
being addressed through agency enforcement. In fact, the back wages owed to
H-1B employees via enforcement actions actually declined from FY 2005 to FY
2006, covering only $4.6 million in back wages, a small total in the context
of an economy with a GDP of over $12 trillion. In DOL investigations, approximately
90 percent of cases are found to be paperwork offenses or misread employer obligations,
not "willful" violations, and of these dozen or so willful violations
each year none have been committed by companies with household names.

The study found that a bill (S. 1035) sponsored by Senators Richard Durbin
(D-IL) and Charles Grassley (R-IA) contains a number of measures so extreme
it will render H-1B visas virtually unusable for many employers. This is important
because amendments containing parts of S. 1035 are likely to be offered to the
immigration bill currently under consideration in the Senate. S. 1035 would
essentially force high tech company hiring and recruitment practices to adhere
to Department of Labor requirements, stifling both innovation and the search
for talent. While supporters of S. 1035 claim they are trying to protect H-1B
visa holders from abuse, the group Immigration Voice, whose membership consists
of current H-1B visa holders, has stated the measures would "make it virtually
impossible for employees to seek new jobs if they are on H-1B visas because
of all the conditions and strings imposed on filing H-1B petitions."

Some have argued that certain companies are using H-1B visas as part of an
effort to "outsource" jobs from the United States.

"It is ironic to be concerned about 'outsourcing' in the context of H-1Bs,
since denying all companies access to talented foreign-born professionals here
in America due to a lack of H-1B visas likely does more to encourage U.S. employers
to build up human resources overseas than any other U.S. policy," said
Stuart Anderson, Executive Director, National Foundation for American Policy.
"Companies inevitably will follow the talent."

The 10 companies most cited as allegedly using up most of the H-1B visas and
causing the "outsourcing" of U.S. jobs to India or elsewhere actually
used less than 14 percent of new H-1B petitions approved in 2006 for initial
employment, according to U.S. Citizenship and Immigration Services data obtained
by the National Foundation for American Policy. Moreover, the new H-1B professionals
hired in 2006 by these global companies totaled fewer than 15,000, representing
0.01 percent of the U.S. labor force and less than 4 percent of the approximately
440,000 people employed by these 10 companies worldwide. The study concludes
that such a small number and proportion of employees are not leading to a loss
of large numbers of American jobs, particularly within the context of a U.S.
economy producing employment for over 145 million people.

Since 2003, the number of net new jobs in America has increased by over 8 million,
according to the Department of Labor. The Bureau of Labor Statistics projects
growth of 100,000 jobs a year in computer and math science occupations between
2004 and 2014, the highest of all white collar professional categories. From
1950 to 2000, employment in science and engineering occupations grew from fewer
than 200,000 to about 4.8 million workers, according to the National Science
Foundation.

Among the other findings in the study:

U.S. IT Professionals Doing Well Economically. U.S. professionals in
information technology (IT) are doing well economically and are among the best-compensated
workers in the world. "Software engineers have the best jobs in America,"
according to a 2006 Money magazine survey. American professionals in "computer
and mathematical" occupations are at virtual full employment, with a low
annual unemployment rate of 2.4 percent in 2006. U.S. salaries in computer and
math occupations increased by 2.4% between May 2004 and May 2005.

Low Rate and Number of Unemployed Programmers. The current low unemployment
rate of 2.8 percent in the category of programmers means fewer than an estimated
17,000 computer programmers nationwide are unemployed, with the vast majority
facing "frictional" unemployment, simply between jobs, or located
in the wrong geographic area or possessing the wrong skill set. There is no
evidence this rate would be lower even if the U.S. stopped the entry of all
H-1B professionals.

Proportion of New H-1Bs in U.S. Labor Force. New H-1B professionals
accounted for only 0.07 percent of the U.S. labor force in 2006.

Impact on U.S. Professionals. There is little evidence native information
technology (IT) workers are harmed by the entry of H-1B professionals. A study
by Madeline Zavodny, a research economist at the Federal Reserve Bank of Atlanta,
concluded, "None of the results suggest that an influx of H-1Bs . . . lower
contemporaneous average earnings. Indeed, many of the results indicate a positive,
statistically significant relationship." This would mean H-1B employment
is actually associated with better job conditions for natives because H-1B professionals
are complementary to native professionals.

Companies Paying $300 Million to Fund Anti-Fraud Efforts. In the past
two years, to combat potential fraud in H-1B and L-1 visas companies have paid
more than $300 million in government-imposed fees to fund a State Department/DOL/DHS
effort.

Back Wages Owed Are Small. DOL investigations found back wages were
owed to less than 1 percent (0.28 percent) of the individuals who received H-1B
status between FY 1999 and FY 2002. In examining all DOL final agency actions
of alleged abuse between 1992 and 2004, the average amount of back wages owed
to an H-1B employee was only $5,919 - that is about the amount of money U.S.
employers typically pay in H-1B legal and government-imposed fees, undermining
claims of significant abuse and vast underpayment.

The Market Has Determined the Use of H-1B visas. When Congress raised
the limit to 195,000 a year in FY 2002 and 2003, in both years fewer than 80,000
visas were issued against the cap, leaving 230,000 H-1B visas unused in those
two years. Firms did not hire more H-1Bs just because the cap was higher. If,
as critics allege, companies saved money because hiring H-1Bs is cheaper, then
businesses should have used more H-1Bs when the economy worsened in 2002 and
2003, not fewer, as the data show.

Companies Would Send All Work Abroad If Only Wages Mattered. It is offensive
(and incorrect) to argue, as some do, that the only reason a U.S. company would
hire a foreign-born scientist or engineer is because he or she will work more
cheaply. The National Science Foundation and other sources show foreign-born
scientists and engineers are paid as much or more as their native counterparts.
If companies simply wanted to obtain services based only on wages, then U.S.
companies would move all of their work outside the United States, since the
median salary for a computer software engineer is $7,273 in Bangalore and $5,244
in Bombay, compared to $60,000 in Boston and $65,000 in New York, according
to the Seattle-based market research firm PayScale (2006).

H-1B Visa Holders Possess Labor Mobility. It is not true that H-1B visa
holders are "indentured servants." In fact, they change companies
frequently and Congress made it easier for those in H-1B status to change jobs
by allowing movement to another employer before all paperwork is completed.
Data from the Department of Homeland Security show that in FY 2005 more H-1B
applications were approved for "continuing" employment than for initial
employment. While continuing employment also includes H-1B professionals receiving
an "extension" to stay at the same employer for an additional three
years, anecdotal evidence indicates most "continuing" employment involves
an H-1B visa holder changing to a new employer. To the extent H-1B visa holders
are reluctant to change jobs after beginning an application for a green card,
the solution is to provide more employment-based immigrant visas and eliminate
the current backlog.

U.S. Companies Spend Billions to Support Education. Though some argue
companies should not be permitted to hire international students and other foreign
nationals on skilled visas unless they do more to support U.S. education, U.S.
businesses pay over $91 billion a year in state and local taxes directed toward
public education, while the mandated scholarship and training fees U.S. companies
now pay for each H-1B professional hired are approaching $2 billion since 1999.
These fees have funded more than 40,000 scholarships for U.S. students in math
and science through the National Science Foundation, hands-on science programs
for 80,000 middle and high school students and 3,700 teachers, and training
for more than 55,000 U.S. workers and professionals. In addition, many companies
and company foundations already make education a central part of their community
outreach and philanthropy.

Green Cards Not a Substitute for H-1Bs. Those who argue we should increase
green cards but not H-1B visas present a false choice. It is perfectly legitimate
for companies to hire individuals on H-1B visas as either a pathway to a green
card or for short-term assignments, as has been done historically, just like
Americans often go to other countries to work on a temporary basis.

About the National Foundation for American Policy
Established in the Fall 2003, the National Foundation for American Policy (NFAP)
is a 501(c)(3) non-profit, non-partisan public policy research organization
based in Arlington, Virginia focusing on trade, immigration and related issues.
The Advisory Board members include Columbia University economist Jagdish Bhagwati,
Ohio University economist Richard Vedder and other prominent individuals. Over
the past 24 months, NFAP's research has been written about in the Wall Street
Journal, the New York Times, the Washington Post, and other major media outlets.
The organization's reports can be found at www.nfap.com.